The source code does not get to the filesystem on the prod server. It is sent to the Docker daemon when it builds the image. After the build ends, there's only the image on the prod server.

I am now convinced that this is a hidden docker feature that too many people aren't aware of and do not understand.

Yeah, I definitely didn't understand that! Thanks for explaining. I've bookmarked this thread, because there's several commands that look more powerful and clean than what I'm currently doing which is to "docker save" to TAR, copy the TAR up to prod and then "docker load".